Chapter 4.10 — RENT STABILIZATION

This chapter shall be known as the "2022 Rent Stabilization Ordinance." (Ord. 2070 § 3, 2022)

This chapter shall supplement the City's current rent control measures in place at Chapter 4.08 by enforcement, interpretation, and further regulation pursuant to 4.08.140. Chapter 4.08 shall continue to apply for those residential rental units covered by Chapter 4.08. For those residential rental units exempt or otherwise excluded under Chapter 4.08, this chapter shall apply unless such residential rental units are exempt as provided by this chapter. (Ord. 2070 § 3, 2022)

Increases in rent on residential real property in the City of Palm Springs in excess of 10%, or 5% plus local consumer price index, whichever is lower, and more than one rent increase in any 12 month period, are prohibited, unless expressly exempt under the Costa-Hawkins Rental Housing Act codified in California Civil Code section 1954.50, et seq.

Increases in security deposits shall be subject to the above prohibition on rent increases. In addition, a landlord may not demand or receive security, however denominated, in an amount or value in excess of an amount equal to one month's rent, in the case of unfurnished residential property, and an amount equal to two months' rent, in the case of furnished residential property." (Ord. 2070 § 3, 2022)

This ordinance allows for an annual adjustment of residential real property rent of up to 10%, or 5% plus local consumer price index, whichever is lower. Such an increase is found and determined to provide a just and reasonable return on an owner's property, and has been adopted to encourage good management, reward efficiency, and discourage the flight of capital, as well as to be commensurate with returns on comparable investments, but not so high as to defeat the purpose of curtailing excessive rents and rental increases. Notwithstanding the foregoing, however, any owner of residential real property who contends that the limit on rental increases set forth in 4.10.030 above will prevent the owner from receiving a fair and reasonable return on their property may petition for relief from the cap set forth in section 4.10.030 pursuant to the procedures set forth in section 4.10.050.

(Ord. 2070 § 3, 2022)

• (a) An owner of residential real property may petition for a rent increase in excess of that provided in section 4.10.030 in order to obtain a fair and reasonable return on their property ("Fair Return Petition"). Such Fair Return Petition shall be on an application form prescribed by the City and shall be decided by the Rent Review Commission. Owner shall provide a copy of any Fair Return Petition submitted to the City to the applicable tenant(s)

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City of Palm Springs, CA § 4.10.050

PALM SPRINGS CODE

§ 4.10.050

and provide City with proof of completing such service to the applicable tenant(s). The tenant(s) will then have 30 days from the date of receiving the Fair Return Petition to reply or provide additional materials to the City in response to the Fair Return Petition. The applicant shall bear the burden of establishing that a rate increase in excess of that provided in section 4.10.030 is necessary to provide the applicant with a fair and reasonable return on their property, including by providing an independent financial report and verified financial data demonstrating that without such an increase, they will not realize a fair and reasonable return on their property.

• (b) Applicant shall be responsible for all costs associated with the City's review of the Fair Return Petition. Upon receipt of a Fair Return Petition, the Rent Review Commission shall determine the anticipated costs of review and if the employment of expert(s) will be necessary or appropriate for a proper analysis of the applicant's request. If the Rent Review Commission so determines, the Rent Review Commission shall also determine the anticipated costs of employing such expert(s). The resulting figure shall be communicated to the applicant, and the Fair Return Petition shall not be processed until the applicant has paid to the city the estimated cost of the complete analysis. City will provide applicant with an invoice of all costs incurred after the review of the Fair Return Petition. Any unused portion of the advance payment for analysis shall be refunded to the applicant. If additional funds are required, payment will be required before applicant receives the determination on the Fair Return Petition from the City.

• (c) The factors the Rent Review Commission may consider in deciding a Fair Return Petition may include, but not be limited to:

  • (1) Changes in the most local Consumer Price Index published by the Bureau of Labor Statistics.

  • (2) The rent lawfully charged for comparable residential real property or mobile home spaces in the city.

  • (3) The length of time since the last determination by the Rent Review Commission on a rent increase application, or the last rent increase if no previous rent increase application has been made.

• (4) The completion of any capital improvements or rehabilitation work related to the residential real property or mobile home space or spaces specified in the Fair Return Petition, and the cost thereof, including materials, labor, construction interest, permit fees, and other items the Rent Review Commission deems appropriate.

  • (5) Changes in property taxes or other taxes related to the subject residential real property or mobile home park.

  • (6) Changes in the rent paid by the applicant for the lease of the residential real property or land on which the subject mobile home park is located.

  • (7) Changes in the utility charges for the subject residential real property or mobile home park paid by the applicant, and the extent, if any, of reimbursement from the tenants.

  • (8) Changes in reasonable operating and maintenance expenses.

  • (9) The need for repairs caused by circumstances other than ordinary wear and tear.

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City of Palm Springs, CA

§ 4.10.050

§ 4.10.060

RENT

• (10) The amount and quality of services provided by the applicant to the affected tenant(s).

• (11) Any existing written lease lawfully entered into between the applicant and the affected tenant(s).

• (d) A Fair Return Petition shall be decided by the Rent Review Commission within 10 days following the close of evidence, including proof of service of the Fair Return Petition on the applicable tenant(s). The decision shall be emailed and sent by mail, with proof of mailing to the subject property owner, the owner's designated representative(s) for the Fair Return Petition, and a designated representative of the tenant(s). The decision of the Rent Review Commission shall be final and not appealable.

• (e) If the Rent Review Commission is unavailable for any reason, the Fair Return Petition shall be decided by a hearing officer, selected by the City Manager, which hearing officer shall conduct its review pursuant to the procedures set forth in this section.

• (f) Notwithstanding any provision contained in this Code, the decision of the Rent Review Commission or hearing officer shall be the final administrative decision of the City, with no right of review by the City Council.

• (Ord. 2070 § 3, 2022)

• (a) Pursuant to the Costa-Hawkins Rental Housing Act, the provisions of this ordinance regulating the amount of rent that a residential real property owner may charge shall not apply to the following: any residential real property that has a certificate of occupancy issued after February 1, 1995 (California Civil Code section 1954.52(a)(1)); and, any other provisions of the Costa-Hawkins Rental Housing Act addressing exemptions, as applicable.

• (b) Pursuant to the Tenant Protection Act of 2019, California Civil Code section1947.12(d), the provisions of this ordinance regulating the amount of rent that a residential real property owner may charge shall not apply to the following:

  • (1) Dormitories owned and operated by an institution of higher education or a kindergarten and grades 1 to 12, inclusive, school.

• (c) The provisions of this ordinance regulating the amount of rent that a residential real property owner may charge shall not apply to the following:

  • (1) A unit subject to City Code Chapter 4.08.

  • (2) A unit in a hotel, motel, inn, tourist home, or rooming and boarding house which is rented primarily to transient guests for a period of less than 30 days; and other transient occupancies as defined in California Civil Code section 1940, subdivision (b).

  • (3) A unit in an institutional facility, including a hospital, medical care facility, residential care facility, asylum, group home for seniors or the disabled; a rental unit in a transitional housing program that assists homeless persons as defined in California Civil Code section1954.12; a convent or monastery owned and operated by a religious organization; and a fraternity or sorority house affiliated with a college or university.

  • (4) Housing accommodations which a government agency or authority owns, operates, or

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City of Palm Springs, CA § 4.10.060

PALM SPRINGS CODE

§ 4.10.090

manages, or that state or federal law or administrative regulation specifically preempt from municipal rent regulation.

• (5) A unit that the owner or the owner's immediate family occupied as their principal place of residence at the beginning of the tenancy so long as the owner or the owner's immediate family continues in occupancy. Immediate family is limited to the owner's spouse, parents, children, grandparents, grandchildren, brothers, sisters, aunts, uncles, nieces, and nephews.

• (Ord. 2070 § 3, 2022)

No rent increase shall be effective if the owner:

• (a) Fails to substantially comply with all provisions of this chapter, including but not limited to the failure to provide notices as required by this chapter; or

• (b) Fails to maintain the residential real property in compliance with California Civil Code Sections 1941.1 et seq. and California Health and Safety Code sections 17920.3 and 17920.10 as determined by the City or court of competent jurisdiction; or

• (c) Fails to make repairs ordered by the City or court of competent jurisdiction. (Ord. 2070 § 3, 2022)

• (a) An owner of any residential real property subject to this chapter shall, on or before the date of commencement of a tenancy, give the tenant a written notice which must include the following information:

  • (1) The existence and scope of this Chapter 4.10 of the City Code; and

  • (2) The tenant's right to respond to any Fair Return Petition filed with the City by the owner pursuant to section 4.10.050.

• (b) As part of any notice to increase rent, an owner must include:

  • (1) Notice of the existence of this Chapter 4.10 of the City Code; and

  • (2) The tenant's right to respond to any Fair Return Petition filed with the City by the owner pursuant to section 4.10.050 unless such rent increase is pursuant to an approved Fair Return Petition.

  • (3) No rent increase shall take effect until the requirements of this chapter have been met.

• (c) The owner must give notices to the tenant in the language that the owner and tenant used to negotiate the terms of the tenancy.

• (Ord. 2070 § 3, 2022)

For the purposes of this chapter, "Rent" means all periodic payments, as well as any security deposit, and all nonmonetary consideration, including, but not limited to, the fair market value of

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City of Palm Springs, CA

§ 4.10.090

§ 4.10.120

RENT

goods or services rendered to or for the benefit of the owner under an agreement concerning the use or occupancy of residential real property, including all payment and consideration demanded or paid for parking, pets, furniture, and subletting. (Ord. 2070 § 3, 2022)

• (a) It shall be unlawful for any person to violate or fail to comply with any provision of this chapter. The violation of any provision of this chapter shall first be punished through the use of a civil citation, prior to prosecution as a misdemeanor, infraction, or civil injunction as provided in City Code Chapter 1.10.

• (b) Any owner who intentionally demands, accepts or retains any payment in violation of the provisions of this chapter shall be liable in a civil action to the tenant from whom such payment is demanded, accepted, or retained for damages in the sum of three times the amount by which the payment demanded, accepted, or retained exceeds the maximum amount which could be lawfully demanded, accepted, or retained together with reasonable attorneys' fees and costs as determined by the court.

• (Ord. 2070 § 3, 2022)

Those subject to the ordinance codified in this chapter shall pay the rent stabilization fee as established by City Council resolution. The rent stabilization program fee is to fund the City's cost to implement and enforce the provisions of the ordiancne codified in this chapter. (Ord. 2070 § 3, 2022)

The City Manager and their designee is hereby authorized to promulgate and enforce administrative regulations in the implementation and enforcement of this chapter. (Ord. 2070 § 3, 2022)

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City of Palm Springs, CA